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Thread: A sponsor opens up about the reality of backing UFC fighters

  1. #1
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    Default A sponsor opens up about the reality of backing UFC fighters

    http://www.mmajunkie.com/news/2013/1...g-ufc-fighters

    "I think it's just the equation of everyone seeing the logo didn't really mean that everyone was going to buy stuff," Molenkamp told MMAjunkie.com Radio. "People loved 'Kimbo,' and we sold a lot of his T-shirts. But they were also so quick to abandon him when he got knocked out.

    "That's just the weird part about MMA sometimes, that sometimes it just goes so quick. You have a guy that you're building up, and the next thing you know, they get knocked out. Once something goes wrong, everyone hates them or just doesn't support them any more. That's the tough part for us as a brand."

    Molenkamp's entry into MMA came through his work in action sports. As a marketing head for shoe company Osiris, he sponsored several athletes. Then, seeing the sport boom following the success of "The Ultimate Fighter," he and his partner started an apparel company, Throwdown Industries. The partnership failed after a year, but he formed another company, Triumph United, which continues to sponsor athletes.

    Unlike those early days, Triumph now pays for the privilege to back UFC fighters. The company has managed to keep its doors open despite several "difficult" periods in its history. At one point, Molenkamp pulled it out of the MMA market for a year. But seeing revenues decline, he got back in the game.

    "We see that being in there is worth being in there, but for a lot smaller piece of the pie nowadays," he said.

    UFC featherweight Cole Miller recently spoke to MMAjunkie.com about the difficulties of securing sponsors critical to his bottom line and success as a professional athlete. Frustrated at chasing a shrinking pool of money, he drew a line in the sand about what he would accept from companies and urged other fighters to do the same.

    Molenkamp is sympathetic to Miller's plight, and yet spoke at length about the challenges facing a company that wants to sponsor an athlete – and whether it's possible to make a return on investment. Like his deal with Ferguson, there was a surge of interest in his company, but little to sustain a relationship.

    The way it is now, Triumph is selective with its investments.

    On how the sponsorship market has changed in the past few years:

    "What the main difference is now, and what a lot of these guys don't see, is that a brand has to put out a lot as a sponsor just to sponsor the fighters. We have to pay the UFC first of all, and then we have to pay the fighters. And then we have to pay our overhead for building the equipment or building the clothing we're trying to sell to retailers that have literally almost have gone out of business in the last couple of years. That's just where it's become very tough. Quite honestly, we're not seeing a lot of return on investment."

    On the UFC's role in the marketplace:

    "The UFC is not doing much to help us out, and there's not as many retailers out there. So it makes it a lot tougher for us to even do anything with guys nowadays than before. Four or five years ago, there was way more opportunity to sell a product and get stuff out there. Now, there's just a finite group of people that are buying it.

    "We pay them a lot of money just to be in the game, and just to have our logo seen. It's almost like an advertising cost. But at the same time, we're expendable. If we're not there, it doesn't really make a difference, and that's just something I'm not used to. I come from the action-sports world, where it's a family and you know the brands that are involved and you know what to expect. Whereas in MMA, you go back five years, and think about how many big brands have come and spent a lot of money in the space, and then left.

    "I don't think these guys realize – the UFC is putting on fights every other weekend, and it just adds up. And if you're not sponsoring somebody all the time, you're not in there, and then your investment in the UFC is pretty much gone."

    On the effect of the sponsor "tax":

    "I think in the beginning, it was a way to keep people out that weren't ready to play. But in time, you just saw a lot of guys that spent that money initially, and they confused all the fighters. Now, the fighters are like, well... If you look at the lineage of some of these athletes, where they started in the UFC to the championship level, they've had multiple sponsors across the board. None of them are really consistent. That's where the fans get confused, because they don't know what to buy. The big retailers outside of MMA, they're not even touching MMA like they used to. That's where it's hurting us. That's what makes it tough for a sponsor.

    "You've got somebody fighting on a Facebook card. How are we going to pay you when we don't even know if we're going to get anything back? If we do decide to give you some equipment, or if we give you a couple hundred bucks, we're still giving you something. At the end of the day, it's still better than nothing."

    On the price of the tax:

    "I think it's just who you are. There's no real rhyme or reason on what it is. I just think they evaluate your brand and predetermine (that you're a) $100,000 brand. Or, 'We like you and think that you're cool.' I've heard there's brands that don't even pay, and it's insane to me that some brands don't pay. At the end of the day, the UFC can do whatever they want. It's their company. But it's just not building an endemic market. There's no real validation on how they pick out what number you're paying, at least nothing I've seen. What we're paying, it was just, 'Hey, this is what you're paying.' If you want to stay in the game, you've got to pay the price."

    On the unpredictability of the market:

    "You could literally sponsor a fighter for a couple of fights, and the next thing you know, he's got a title fight. Now, all of a sudden, the agents and the managers are asking for a lot more money that's not completely in line with what your sales are, and you have to take that risk. You either do it or you don't. If you don't do it, you see all the hard work that you've done go to another sponsor, and potentially [the fighter] wins the fight and it's their big deal. But if they lose, you're out of business. So it's the biggest gamble ever."

    On the role of managers:

    "Some of them are really good, and some of them are really bad. The fighter wants to have some business separation between his training and his fighting and his business, and he hires somebody to work that angle for them. Some of these guys are educated and they have an idea of what they want to do, and some of these guys that are just friends that are trying to pick up the slack. It doesn't always work out. I've seen it multiple times where a guy is trying to broker a deal for his friend, and they're not really looking at it for what it is. They're really just trying to make as much money as they can for the fighter for that one fight, which is not wrong. But at the same time, it's not looking for him long-term. That's where it affects all of us."

    On the responsibility of the fighter:

    "You hear that a lot from these guys – 'I just want to fight.' But being a professional fighter, it doesn't mean you just fight. There's a lot more. You have to build your name. You have to build who you are so people want to watch you fight and actually want to support you. At the end of the day, they're paying to watch you fight. The fans have to pay to watch these guys fight, which goes back to salaries. Obviously, that's where sponsors look, because if they're a notable athlete, they're going to sell some product. And that's where the game starts.

    "As a brand, we're always going to be very cautious because we do realize there's that point in time when, if we start working with somebody early on and they start moving up the ranks and they reach that level of being a champion, we know the numbers are going to change. There's a certain point where we have to decide if we're going to move on because it has to make sense for us financially. If it doesn't, we're not going to do it."

  2. #2
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    Interesting read.
    Thanks.

  3. #3
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    I'd like to think that if the UFC taxed all sponsors but for less than they're charging some, they'd still maintain their curent revenue from sponsors while giving fighters more sponsor choices to make money from. I believe it would be an ideal scenario, but unlikely to happen.

    It would be great to see undercard fighters get more opportunities to make money from sponsorships. And that's not a knock on the pay structure the UFC currently implements.

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